Falling petrol prices have given cheer to people and businesses and may stimulate consumer demand in the near future.

Nguyen Minh Chau, Director of Hanoi CNC Accurate Mechanical Company Limited, said that petrol prices accounted for the majority of transportation and logistics costs of enterprises.

With prices continuing to plummet, people and businesses are very excited as gasoline prices have successively surged in the past months, putting pressure on businesses, said Chau.

Although not a unit operating in the transportation industry, the decrease in gasoline prices has also partly had a good influence on the transportation, production and business activities of the company, said the director.

Nguyen Côong Thang, a driver of the Hà Nội – Hai Phong route, said when gasoline was above VND30,000 per litre (US$1.3), the one-way cost was about VND500,000, but with the past two strong reductions, the cost has fallen to VND400,000.

“We as citizens are very happy when the price of gasoline drops continuously. The cost is less. I also hope that, in the future, if possible, the government's policies will continue to lower the price of gasoline; at the same time, controlling prices of daily living items," he added.

Bui Danh Lien, Vice Chairman of the Hanoi Transport Association, said that the reduction in gasoline prices helped businesses in the transport industry reduce production and operating costs.

However, the world petroleum price movements are still unpredictable, though there is still room for price reductions domestically.

The Government, ministries and branches will continue to propose to reduce import tax and excise tax to further lower gasoline prices, help cut down costs, and enhance the competitiveness of enterprises.

Proposal on tax reduction

The Directorate for Roads of Vietnam (DRVN) has sent a written request to propose a reduction in value-added tax for transportation services and reduce corporate income tax to support transport businesses.

The directorate said that through its survey of the operation of transport businesses across the country, it found that transport enterprises were facing many difficulties and operating in moderation.

While fuel prices soar, fuel costs in the cost structure account for 35-45 per cent, and many transport enterprises in provinces and cities across the country have not yet increased their freight rates.

For freight transport, the survey showed that with the current gasoline price, freight rates should increase by 10-20 per cent depending on the route and type of goods to offset the increase in fuel prices.

Source: VNS